Research Demonstrates Effects Of Fee Increases

21 August 2000

MEDIA RELEASE
21 August 2000

UNIVERSITY RESEARCH DEMONSTRATES EFFECTS OF FEE INCREASES

Tertiary tuition fee rises impact most on middle class European students, lower socio-economic groups lacking parental financial and intellectual support, and ethnic minorities commonly found in that lower socio-economic group.

The finding is from a report, "The Economic Implications of Tertiary Fee Rises in relation to Student Welfare and the Policy Environment", that was presented today to The University of Auckland Council.

The report canvasses extensive overseas surveys into the impacts of student fee rises on the socio-economic and ethnic make-up of student bodies within tertiary institutions and examines common links within New Zealand institutions.

University of Auckland Pro Vice-Chancellor (Equal Opportunity) Professor Dame Anne Salmond says although there has been a lot of discussion about the impact upon students of increased tuition fees, there has been a lack of comprehensive data analysis.

“The University of Auckland undertook to prepare this report in the interests of contributing to an informed debate about tertiary tuition fee structures.

“The report shows that there has been a significant reduction in part-time students and European and Maori students in the past five years despite the fact overall enrolments have been increasing.

“We are also noticing a change in the numbers of students from low income decile schools participating in tertiary education.

“Maori, Pacific Island and lower socio-economic group students tend to enrol in certificate and diploma courses and those with lower entry requirements.

“It is also clear that as fees increase and students take out loans to cover those fees and living expenses, their future ability to borrow to establish homes or businesses is limited and this creates potentially greater brain drain and future loan eligibility problems.

“In addition, issues such as the student loan interest rate become increasingly important in relation to the lifetime effective incomes of graduates, the overall amounts paid, and the number of years required to fully repay student debt.”

The report compiled by Dr Sholeh Maani, an Associate Professor in Economics at the School of Business and Economics, and recent graduate Adam Warner (Master of Commerce in Economics) also examined the impact of Government's recent change to interest rates on student loans.

Analysis of loans for general practice solicitors, public hospital doctors, provisional and chartered accountants and professional engineers showed graduates faced increasing debt repayment times until the year 2000 change to zero interest while studying. That policy change reduced or offset the effect of rising fees except in the cases of medicine and engineering.

“Two other important trends clearly emerged in this report,” says Professor Salmond.

“The first is that we must have some stability and continuity of funding. This is crucial for students and their families considering funding three to six years of study and has clearly been lacking in the past decade.

“It is also clear that part-time work is no longer viable as a method of funding University studies as there is limited capacity in the youth and part-time labour market. For students eligible for the allowance, the current limit of $135.13 per week before a student loses their allowance compounds the problem. In the past the limit was $5,000 in the 37 weeks of the University calendar allowing students to work as opportunities became available rather than limiting them to a weekly handout.”

Professor Salmond says the report findings provide a useful contribution to the future development of funding policies for tertiary education.

For further information contact:

Professor Dame Anne Salmond
Pro Vice-Chancellor (Equal Opportunity)
The University of Auckland

Ph. 09 373 7599 ext 8544

Bill Williams
Public Relations Officer
The University of Auckland

Ph. 09 373 7599 ext. 7698

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